What you need to know about moving in together and money
It might not sound very sexy, but it’s crucial that you fully understand where you stand legally and financially before you move in with a romantic partner. And it’s especially important that you know what will happen if the relationship ends.
Before you make the big move and start unpacking your bags, there are some things you need to think about
Your partner’s finances
When you start dating someone there’s a lot to find out about them. But what do you already know about your partner’s financial history?
Are you aware of any debts or any savings? Do you know if they have long-term goals when it comes to cash?
If you already know, brilliant, you’re doing better than most.
But if not? All is not lost. It might sound strange, but take your new roomie on a Lockdown money date and get to know a little more about each other’s finances.
Waiting until you have a money-related issue means it’s too late, emotions are high, and rash decisions will likely be made.
Honesty and openness about money is essential once you’re living with someone, and the effects can last longer than you might think.
If your partner hasn’t repaid their debts on time, it may affect your ability to get credit
Joint accounts and credit score
While a joint bank account can often seem like a no-brainer for paying shared bills, the risks might outweigh the advantages.
Living with someone or being married to them will not affect your credit rating alone, but as soon as you open a joint bank account together, you’ll be “financial associates”.
What’s more, the credit record of the other account holder will have an impact on your own score.
This means that if you or your partner applies for credit in the future, the lender will be able to check both of your credit records.
If your partner hasn’t repaid their debts on time or, worse, has been declared bankrupt, it may affect your ability to get credit.
Paying the bills
If you’re moving into someone else’s home, make sure that you’re aware of exactly what bills you’ll need to pay and how much they will cost.
Many flats will have additional fees, such as maintenance and ground rent, which can add up to thousands of pounds of additional bills annually.
Remember to also think about how you’ll split your bills. It’s unlikely that you and your partner will be earning exactly the same amount so you must consider: will you split all of your bills 50/50, or will you split them as a percentage based on your income?
Don’t forget that whoever’s name is on the bill is the one who will ultimately be liable for payment of the bill if a relationship ends, so play it safe and make sure both of your names are listed where you can.
Tenancy agreements and liability
Make sure that you have the correct documentation in place before you move in together so if it doesn’t work out you’re covered.
If you’re renting a property and you’re both named as tenants, you have the same rights because you’re “joint tenants” of the property.
If one party moves out and they’re still named as a tenant on the contract, they will be liable for rent payments.
However, this does mean that person is also able to move back in at any point should they wish to.
Make sure that if you separate and you move out of the property, your name is removed from the tenancy to avoid being stung by rental payments.
Mortgages and liability
If you move in with a partner who already has a mortgage, you don’t automatically have any rights over their mortgage, and vice versa.
However, if you decide to call it quits further down the line, things could look a little different.
Draw up a cohabitation agreement ahead of moving in together
If you had contributed to your partner’s mortgage over the course of the relationship, you might acquire what is called a “beneficial interest” in the property.
This means that you might be eligible for money gained from the sale of the property in the event of a break-up. The same is, of course, true if you’re the homeowner and your partner had been contributing to your mortgage.
To help clarify things, you could draw up a cohabitation agreement ahead of moving in together. Then, if the relationship ends, you each know where you stand.
A cohabitation agreement sets out who owns what and in what proportion. It lets you document how you’ll split your property and its contents, personal belongings, savings and other assets should the relationship break down.
How much this will cost varies and depends on the complexity of your affairs. Using a solicitor can mean a bill of thousands of pounds. However, if you opt for a fixed-fee service, you could have it sorted for a few hundred quid.
3 things to do right now...
Get a will. Without one, should you die, all your property and assets will automatically pass to your family rather than your partner. If you don’t already have a solicitor, visit the Law Society’s Find a Solicitor website and search under “Family and relationships” to get details of solicitors in your area.
If you have a home insurance policy, it will need to be in both your names. Similarly, if you’ll be sharing a car make you sure that you’re a named driver on the motor insurance.
Many government-backed benefits are based not only on your individual wage, but also on total household income. So, if you’re getting any financial help when you move in together, you need to report your change in circumstances
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Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.
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